What is the VA funding fee?

A one-time cost mandated by federal law to help lower the cost of the VA loan program for taxpayers. It varies by loan type, first vs. subsequent use, and down payment tier. Many borrowers with service-connected disabilities are exempt.

Can I finance the VA funding fee?

Yes. Most borrowers roll the funding fee into the loan. This increases the loan amount and monthly payment slightly.

What funding fee rate applies to IRRRL (VA streamline)?

IRRRLs carry a 0.5% funding fee, and many fees are limited. If you are exempt due to disability, the fee is waived.

Does this calculator include property taxes and insurance?

Yes. You can enter annual property tax and homeowners insurance. We show P&I separately and then add escrows (taxes, insurance, HOA) to estimate the total monthly payment.

Is the result a loan offer or financial advice?

No. This tool is for educational purposes only and does not constitute credit advice or a loan offer. Contact a licensed lender for a formal quote.

Are VA loans always zero down?

The VA program permits 0% down up to county limits, but you may choose to put money down. A down payment can reduce the funding fee and monthly payment.

What if my interest rate is 0%?

If APR is 0%, we compute P&I as a straight-line payment: Payment = Principal / number of months.

VA Loan Calculator

Authoritative Data Source and Methodology

Primary authority: U.S. Department of Veterans Affairs — “VA funding fee and loan closing costs” (accessed 2025-09-13). See: https://www.va.gov/housing-assistance/home-loans/loan-fees/. IRRRL details: VA IRRRL (Streamline) overview.

Tutti i calcoli si basano rigorosamente sulle formule e sui dati forniti da questa fonte.

We implement the VA funding fee rates in effect as published by VA, and the standard amortization formula for fixed‑rate mortgages.

The Formula Explained

Funding fee (FF): $$ FF = L_{base} \times f $$

Total loan (if financed): $$ L_{total} = L_{base} + FF $$

Down payment: $$ DP = \text{Price} \times \frac{dp\%}{100} $$

Base loan (purchase): $$ L_{base} = \text{Price} - DP $$

Monthly payment (if APR > 0): $$ M = P \cdot \frac{i(1+i)^n}{(1+i)^n - 1} \quad \text{where } i=\frac{APR}{12},\ n=12 \cdot \text{years} $$

Zero‑interest case: $$ M = \frac{P}{n} $$

Total monthly estimate: $$ M_{total} = M + \frac{Tax_{annual}}{12} + \frac{Ins_{annual}}{12} + HOA_{monthly} $$

Glossary of Variables

Price: Home purchase price (purchase/build scenario).
DP (% / amount): Down payment percentage and its dollar value.
L_base: Base loan before adding any funding fee.
f: VA funding fee rate (varies by loan type, first/subsequent use, and down payment tier).
L_total: Total loan after adding the financed funding fee (if chosen).
P: Principal used for amortization (L_total if funding fee is financed; otherwise L_base).
APR: Annual Percentage Rate (as a decimal for formulas).
i: Periodic interest rate per month (APR/12).
n: Total number of payments (months) = 12 × years.
M: Monthly principal and interest (P&I).
M_total: Estimated total monthly payment (P&I + taxes + insurance + HOA).

How It Works: A Step‑By‑Step Example

Assume: Price = $400,000; Down payment = 0%; APR = 6.50%; Term = 30 years; Purpose = Purchase; First‑time use; Finance funding fee; Property tax = $3,600/year; Insurance = $1,200/year; HOA = $0.

Down payment amount: DP = 400,000 × 0% = $0.
Base loan: L_base = 400,000 − 0 = $400,000.
Funding fee rate (f): For purchase, first‑time use, <5% down → 2.15%.
Funding fee: FF = 400,000 × 0.0215 = $8,600.
Total loan (financed): L_total = 400,000 + 8,600 = $408,600.
Monthly P&I: Use M = P × [ i(1+i)^n ] / [ (1+i)^n − 1 ], with i = 0.065/12 and n = 360, P = 408,600.
Monthly escrows: 3,600/12 + 1,200/12 + 0 = $400.
Total monthly estimate: M_total = P&I + 400.

Frequently Asked Questions (FAQ)

Who is exempt from the VA funding fee?

Veterans receiving compensation for a service‑connected disability, certain active duty recipients with Purple Heart, and eligible surviving spouses are generally exempt. Lenders will verify exemption status with VA.

How is the funding fee determined?

It depends on loan purpose (Purchase/Build, Cash‑Out, IRRRL), whether it’s your first or a subsequent use of VA benefits, and for purchases, your down payment tier (<5%, 5%–<10%, ≥10%).

Does the funding fee affect my monthly payment?

If you finance the fee, it increases the loan amount and therefore P&I. If you pay it upfront, it does not affect P&I.

Are property taxes and insurance required to be escrowed?

Practices vary by lender and state. This calculator shows both P&I and an estimate for escrow items so you can plan your total monthly outlay.

Can I use this calculator for jumbo VA loans?

Yes. The formulas are the same. Actual lender overlays and county loan limits may affect eligibility and pricing.

What if my APR changes before closing?

Update the APR input to re‑estimate the P&I. Even small APR changes can shift the payment noticeably.

Is PMI required for VA loans?

No. VA loans do not have monthly PMI. The funding fee serves a similar cost‑balancing function for the program.

Tool developed by Ugo Candido. Content verified by CalcDomain Mortgage Analytics.
Last reviewed for accuracy on: September 13, 2025.